We recently compiled a list of the 10 AI News Updates Trending on Wall Street. In this article, we are going to take a look at where STMicroelectronics N.V. (NYSE:STM) stands against the other AI stocks that are trending on Wall Street.
The emerging, cost-effective Chinese AI alternatives have prompted US President Donald Trump to say it is a wake-up call to Silicon Valley. He sees the launch of AI models like DeepSeek r1 and Qwen 2.5 as opportunities rather than threats, given that these innovations can help US companies drive down R&D and deployment costs.
However, the ongoing US earnings season continues to showcase strength in the AI space as companies consistently beat consensus estimates driven by revenues from AI segments.
Semiconductor manufacturers, satellite imagery, IT consultation, and cybersecurity firms continue to heavily integrate AI to reduce operational costs, introduce process transparency, offer global connectivity, and fortify data protection technologies for growth and optimal business productivity.
“The biggest lesson learned is we have to take the unintended consequences of any new technology along with all the benefits and think about them simultaneously – as opposed to waiting for the unintended consequences to show up and then address them,” Microsoft CEO Satya Nadella said at the latest World Economic Forum in Davos. “I don’t think the world will put up anymore with any of us coming up with something where we haven’t thought through safety, equity and trust – these are big issues for the world.”
We selected AI stocks by reviewing news articles, stock analysis, and press releases. We listed the stocks in ascending order of their hedge fund sentiment taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A worker assembling the inner circuitry of a semiconductor product.
STMicroelectronics NV (NYSE:STM)
Number of Hedge Fund Holders: 18
STMicroelectronics NV (NYSE:STM) is a semiconductor design and manufacturing company that sells communication equipment, computer peripherals, and microchips for use in IoT applications, personal electronics, cloud connectivity, and the automotive and industrial industries. The company’s ST Edge AI suite is a collection of AI tools that enable AI on microcontrollers, processors, and smart sensors. For instance, its proprietary neural processing unit called ST Neural-ART Accelerator delivers impressive efficiency in handling AI tasks, while its online STM32 edge AI tools allow developers to create and deploy ML algorithms on microcontrollers swiftly at relatively lower costs. Elsewhere, its Edge AI ST smart sensors embed ML core to facilitate context awareness in industrial equipment and IoT devices that help in several applications, including reducing power consumption and meaningful data-sharing between microchips.
On January 30th, Craig-Hallum reduced STMicroelectronics NV’s (NYSE:STM) target price to $28 from $36 but retained a “Buy” rating on the stock. The brokerage said that the industrial and the automotive markets continue to soften, with STMicroelectronics NV’s (NYSE:STM) expecting a worse-than-seasonal March quarter. The analysts continued to model ratings for the deterioration of the company’s business and highlighted that gross margins and profitability could markedly drop in 2025.
Overall STM ranks 8th on our list of the AI stocks that are trending on Wall Street. While we acknowledge the potential of STM as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than STM but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stock To Buy Now and Complete List of All AI Companies Under $2 Billion Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
